How to invest in non-alcoholic beer during its post-pandemic rise in popularity

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Non-alcoholic beer has existed since the prohibition era, but ever since the late 2010s, it seems to have exploded in popularity, leaving many investors wondering how they can gain portfolio exposure to the rapidly growing sober-curious sector of the adult beverage market.

What exactly is non-alcoholic beer?

Non-alcoholic beer — also called near beer — is defined as any malt beverage with 0.5% or less alcohol by volume (ABV). This threshold was actually established by law during the prohibition era of the 1920s and remains the standard for non-alcoholic adult beverages to this day.

Some NA beers (like O’Doul’s and Clausthaler with ABVs of 0.4% and 0.45%, respectively) do contain a minute amount of alcohol, while others (like Heineken’s NA) are truly non-alcoholic at 0.0% ABV.

Related: Another beer brand files for Chapter 11 bankruptcy protection

When (and why) did non-alcoholic beer become so popular?

During the the pandemic lockdowns of 2020, 25% of people drank more than usual, according to the National Institutes of Health, and alcohol sales rose by 3%. As pandemic-related restrictions eased, leagues of formerly cooped-up imbibers sought to reduce their alcohol consumption, and newly available non-alcoholic beverage options offered a tasty alternative to pure abstinence.

While the widespread popularity of NA beer is a relatively new phenomenon, NA brews have actually been around for quite a while. In 1979, Clausthaler released the first commercially available NA beer since the end of prohibition. Next, O’Doul’s brought its non-alcoholic offering to market early 90s.

Back in those days, however, NA beer was a rarity, and many shops and bars didn’t even stock it. Those that did typically only carried a single brand, and any style outside of a basic lager was unheard of.

Nowadays, NA beers come in every style under the sun — from IPA to cerveza to Kölsch — and it’s not at all uncommon to see grocery stores, bars, and restaurants stocking multiple non-alcoholic options to cater to the diverse tastes of their alcohol-avoidant patrons.

In 2023, Heineken aired the first-ever nationally televised advertisement for non-alcoholic beer during the Super Bowl. Outside of beer, NA wine and spirits have also started to gain traction among the sober and sober-curious.

The NA beer, wine, and spirit market is growing rapidly, and the big breweries are scrambling to add non-alcoholic offerings to their lineups to remain relevant and competitive in a landscape of increasing moderation and sobriety. But what caused this sudden boom in the NA beverage industry? And how can investors gain exposure to this rapidly emerging market while there’s still a long runway for growth?

How large is the non-alcoholic beer market?

According to ResearchAndMarkets.com, the worldwide NA beer market grew from $15.09 billion in 2020 to $16.65 billion in 2021 — that’s 10.34% in a single year. The market’s size is expected to grow further to $23.27 billion in 2025. A separate source, Global Market Insights, pegged the global NA beer market at over $22 billion in 2022 and predicted a compound annual growth rate of 5.9% through 2032.

That being said, NA beer sales still represent only a small fraction of the adult beverage market at large, but that fraction is growing — and fast. Between 2020 and 2023, the percentage of non-alcoholic beer drinkers in the United States exploded from 0.6% to 5.2% of the population according to a report by YouGov; that’s a staggering 766% increase in just three years.

The same report provided another insight that was undoubtedly equally titillating to the beer brands that are trying to capitalize on the growing NA trend: 65% of non-alcoholic beer buyers have $1,000 or more in disposable income to spend each month (compared to only 45% of traditional beer consumers).

Clearly, the NA beer market is a growing honeypot, and most of the major players in the adult beverage business recognize that it’s time to sticky their fingers if they haven’t already.

How to invest in non-alcohol beer

With so much growth in the non-alcoholic beverage space as of late and likely in the future, investors are probably are wondering how they can gain exposure to this niche. In order to figure out the best way to do so, however, we’ve got to examine the top sellers in the category.  

Probably the best way now is to invest in the big brewing companies. O’Douls is owned by Anheuser Busch InBev  (BUDFF) – Get Free Report. It also markets Busch Beer Non-alcoholic and Budweiser Zero.

Here is a list of the most popular non-alcoholic beers whose parent companies trade publicly on major exchanges like the NYSE and Nasdaq.

What are the most popular NA beers you can invest in?

The parent companies of the above beers are all publicly traded in the United States (although some are ADRs, meaning they are foreign stocks that have been repackaged by banks to trade on American exchanges).

Athletic Brewing, a newer brand founded in 2017, graces the top-15 list three times, so it may be worth paying attention to. The popular NA brewery is a subsidiary of Keurig Dr Pepper  (KDP) – Get Free Report, which also owns many popular soda, juice, and coffee brands.

It’s important to note that all of these companies sell a variety of other products in addition to non-alcoholic beers. At present, there is no way to invest publicly in a company that produces and sells only NA beers, but the ticker symbols above represent some of the largest public companies leading the pack when it comes to this growing industry.

How and when to invest

If you’re an average, buy-and-hold investor who wants exposure to the non-alcoholic beer market but doesn’t have time to watch stocks and time trades based on news and technical indicators, it’s probably best not to dump all of your cash into NA beer stocks at once.

Instead, it could be prudent to invest in the above companies in small, equal sums on a regular basis — a process known as dollar-cost averaging — over a longer time frame in order to minimize the effects of volatility on your cost basis. 

In addition, you can buy shares of exchange-traded funds that include alcohol and brewing companies among their targets. Three are AdvisorShares Vice ETF  (VICE) – Get Free Report, Invesco Dynamic Food and Beverage ETF  (PBJ) – Get Free Report, and First Trust Nasdaq Food and Beverage  (FTXG) – Get Free Report.

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